NOTES TO FINANCIAL STATEMENTS
(Unaudited)
September 30, 1999
Note A - Basis of Presentation
On July 27, 2000, Peoples First, Inc., a Pennsylvania
business corporation, completed the reorganization of The
Peoples Bank of Oxford into the holding company form of
ownership. In the reorganization The Peoples Bank of Oxford
became a wholly-owned banking subsidiary of Peoples First, Inc.
The consolidated financial statements include Peoples
First, Inc. (Peoples) and the wholly-owned subsidiary, The
Peoples Bank of Oxford (Bank). All significant inter-company
accounts and transactions have been eliminated. Currently, the
only asset of Peoples is its investment in the Bank.
The accompanying unaudited consolidated financial
statements have been prepared in accordance with generally
accepted accounting principles for interim financial information
and are presented in accordance with the instructions to Form
10-Q and Rule 10-01 of the Securities and Exchange Commission
Regulation S-X.
Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles
for complete financial statements. In the opinion of management,
all adjustments (consisting of normal recurring accruals)
considered necessary for a fair presentation have been included.
Operating results for the nine months ended September 30, 2000,
are not necessarily indicative of the results that may be
expected for the year ended December 31, 2000.
The consolidated financial statements presented in this
report should be read in conjunction with the audited financial
statements and the accompanying notes included in The Peoples
Bank of Oxford's Annual Report and Form 10-K filed with the
Federal Deposit Insurance Corporation for the year ended
December 31, 1999.
Note B - Accounting Policies
The accounting policies of Peoples First, Inc. as applied
in the interim consolidated financial statements presented, are
substantially the same as those followed on an annual basis as
presented in The Peoples Bank of Oxford's 1999 Annual Report and
the Form 10-K filed with the Federal Deposit Insurance
Corporation, for the year ended December 31, 1999.
Note C - Comprehensive Income
The only comprehensive income item that Peoples presently
has is unrealized gains (losses) on securities available for
sale. The federal income taxes allocated to the unrealized gains
(losses) are as follows:
Nine Months Ended
September 30,
2000 1999
(In Thousands)
Unrealized holding gains (losses)
arising during the period:
Before tax amount $274 $(948)
Tax (expense) benefit ( 93) 322
Net of tax amount $181 $(626)
Note D - Acquisition
On April 10, 2000, the Bank issued 56,918 shares of common
stock, with a fair value of $1.4 million, to acquire all of the
outstanding common stock of Gee, Wilmerding & Associates, Inc.,
a Villanova based investment firm. The company is a wholly owned
subsidiary of The Peoples Bank of Oxford and the transaction has
been accounted for as a pooling of interests. Revenues for the
nine months ended September 30, 2000, totaled $599,000. Periods
prior to January 1, 2000, have not been restated as the
adjustments are considered to be immaterial.
Note E - New Accounting Standards
In June 1998, the Financing Accounting Standards Board
issued Statement No. 133, "Accounting for Derivative Instruments
and Hedging Activities" (as amended by Statement Nos. 137 and
138), which becomes effective for Peoples January 1, 2001. The
adoption of the Statement is not expected to have a significant
impact on Peoples financial condition or results of operations.
In September 2000, the Financial Accounting Standards Board
issued Statement No. 140, "Accounting for Transfers and
Servicing of Financial Assets and Extinguishments of
Liabilities" (as a replacement of Statement No. 125), which
becomes effective for Peoples January 1, 2001. The adoption of
the Statement is not expected to have a significant impact on
Peoples financial condition or results of operations.